Customer Relationship Marketing can be confusing. You know it’s important but how do you go about it?
“They didn’t teach me any of this in B’school.”
I can help. I’ve created relationship marketing programs before. In fact I’ve created many.
In my experience, there are five guide posts to keep in mind when you develop a Customer Relationship Marketing (CRM) strategy. Each is a subject in its own right so this article presents them at a high level so you will know what’s important and where you should be focusing your energy.
Relationship Marketing Principles
There are five Customer Relationship Marketing Principles to consider as you craft your relationship marketing strategy:
1. Attract the right customers for the right reasons
2. The most crucial time is the beginning
3. In established relationships continually reinforce the decision to buy
4. Good customers expect to be rewarded
5. The second most crucial time is when the relationship is at risk
Consider the Customer’s View
The customer’s point of view isn’t the same as yours. I’m sure you read this and think, “Now that’s a blinding flash of the obvious.” Well, it may be, but the evidence suggests marketers don’t understand the consumer’s view. Customers view brands and marketing communication efforts from the perspective of their interests and needs, not the marketer’s. Mostly, they don’t pay any attention at all. Sorry, but it’s true. Unless they have entered the purchase funnel all your expensive advertising is at best nothing more than an annoyance.
What does this mean to your relationship marketing strategy?
If your advertising is being seen at all, it is more likely being seen by your customers, than by your prospects. They’ve already made a commitment to you. It may only be a shallow commitment but it’s more than prospects have made so they are more likely to pay attention. Use advertising to reinforce the purchase decision. Talk about things your customers, especially heavy users, value. Don’t insult your customers in your advertising.
When your customers have engaged in the purchase funnel give them the information they need in the medium they prefer. This means don’t repeat the advertising message. They got that already. Give them tangible reasons why they should choose you over the competition. Remember, it’s unlikely you are serving 100% of their requirements. As they engage sell versus their alternatives.
And don’t talk to customers as if you had never met. It sends all the wrong messages when the sales guy in the plaid jacket shows up at a long-term customer’s door step. Talk to them like you know them, because you should and they certainly know you. Resist the temptation to hard sell them. It won’t work nearly as well as treating them like they are partners in your venture.
All Customers Aren’t Equal
The investment in relationship marketing will return many times over when it is directed at Heavy Users, the 20% of customers who generate 80% of revenue. They will value the effort. The rest, not so much.
“It’s the heavy user stupid.”
So don’t waste your money and their time trying to convince them that they should buy more fruit juice when they don’t have children. In other words, don’t try to build a relationship with all your customers. It’s not going to happen. And it doesn’t need to happen. If you can achieve a connection with your best customers, an emotional connection that goes beyond the functional benefits of your product, the relationship marketing strategy is working and will pay off.
Customer Relationship Marketing Takes Time
It’s a strategy not a tactic. Relationship marketing, like any relationship, takes time to develop and pay off. Give it the time to mature and evolve to suite your business. Be sure you have buy in at the highest level. You will need the CEO or CMO to keep the CFO at arms length while you refine the strategy. The results will come.
Creating Relationships
The primary goal of relationship marketing is… creating a relationship. You smile, but pay attention, it means something to the implementation of your strategy. There should be a stream of communication going to your best customers that doesn’t sell anything. Can you feel the tremors from the CFO’s office?
“Oh my God, Marketing has gone crazy. Again.”
A primary goal of relationship marketing is customer loyalty. To do this, you need to put emphasis on building relationships by adding value with your customer relationship marketing strategy that goes beyond the functional benefits of your products or services. You don’t do this with sell, sell, sell.
This will cause your organization (your CFO) to question the wisdom of spending money on customer communication that doesn’t show an immediate ROI. Don’t lose focus. The relationship is worth something to the organization. In fact it’s worth a great deal. In this age of commodity products the emotional connection you build between your company and heavy users of your products or services may be the only insulation you have to competitive offers. Customer Relationship Marketing will mitigate attrition, that sucking sound you can hear but can’t see, which impacts your bottom line in significant but difficult to measure ways.
Selling can and should also be a key part of a good relationship marketing strategy. Just don’t do the selling in isolation. Use your connection with the core of your heavy users to guide your selling strategy. Understand what these customers are interested in by tracking their behavior and interaction with your relationship marketing stream. Use your knowledge to limit sales efforts to customers who will have the greatest interest in what you are offering and the greatest impact on your business.
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